Regal Group, Inc. (OTCBB: RGLG) announced that it has entered into
a Letter of Intent with UHF Logistics Ltd. ("UHF"), whose operating
subsidiaries are leading developers of RFID (Radio Frequency
Identification) solutions for supply chain applications, parkade
management, the pig breeding industry, and anti-theft and secured
access applications in China.
Under the terms of the Letter of Intent, Regal will undertake a
share exchange agreement to acquire 100% of the equity of UHF, for
approximately 35% of the equity of Regal, subject to confirmatory
due diligence.
Regal is keen to establish a dominant position in the
fast-growing RFID industry in China by acquiring the equity of UHF.
UHF specializes in the development, production, and sales of RFID
UHF (ultrahigh frequency) hardware, including UHF readers, antenna
and tags. The company owns intellectual property rights to its next
generation RFID technology platform and its RFID products are
designed for a broad range of applications that span personal and
property safety and security management, e-ticketing management,
tracking in animal breeding, pharmaceutical product fraud
prevention, and warehouse/inventory control.
"Last month we announced our intent to create new value for our
shareholders in 2010 by acquiring new businesses in the technology,
automotive or pharmaceutical industries. We believe we've found the
perfect fit with UHF," said Regal's President, Eric Wildstein. "The
combination of an improving global economy with renewed focus on
operational efficiencies bodes well for Regal with our potential
acquisition of an emerging company in the RFID industry. We
anticipate that the Chinese RFID market will continue to see
consistent, gradual growth in the coming years due to the efforts
of the Chinese government to encourage its expansion."
The completion of the proposed transaction is subject to the
entry by both parties into final definitive transaction agreements
and the satisfaction of the terms and conditions to be set forth
therein, the completion of all necessary legal, financial and
technical due diligence investigations by both parties, and receipt
of necessary consents and approvals, including applicable Chinese
regulatory approvals. Mr. Zao Huang, a partner of Guang He Law Firm
in China, is being retained by Regal to oversee matters relating to
legal due diligence of UHF and Chinese regulatory compliance
issues. Execution of definitive transaction documents is expected
to occur during the second quarter of 2010. There can be no
assurance that the proposed transaction will be completed as
proposed or at all.
Mr. Sammul Su, founder of UHF Logistics' operating subsidiaries
in China, commented: "China's RFID market will grow rapidly as
government agencies and mainstream commercial enterprises seek the
efficacies of upgraded management tools and performance protocols,
and enhanced by increased government policy initiatives guarding
its adoption, through the across-the-board industry adoption of
RFID applications in China. With ongoing enhancements to our
leading RFID technology platform in China and this possibility of
bringing in new foreign management expertise and capital to UHF, we
will be able to build a comprehensive and sustainable sales and
marketing strategy to significantly monetize our technical
expertise in this competitive market."
China RFID Industry Outlook
According to IDTechEx, the global RFID market achieved rapid
growth in 2007, and total market value reached US$ 4.96 billion.
Spending on RFID in East Asia was approximately US$2.7 billion in
2007, of which US$1.9 billion was spent in China due to the peak
delivery of national identification cards in China prior to the
2008 Olympics.
In 2009, the RFID market grew to $5.56 billion, having almost
tripled in five years and up from US$5.25 billion in 2008. This
includes tags, readers and software/services for RFID cards,
labels, fobs and all other form factors. The majority of this
spending is on RFID cards and their associated services -- totaling
US$2.99 billion. The market for RFID is growing as well as
recession-proof and a large amount of this value is due to
government-led RFID schemes, such as those for transportation,
national ID (contactless cards and passports), military and animal
tagging. The largest database of RFID projects in the world is the
IDTechEx RFID Knowledgebase which currently stands at 3900 projects
in 111 countries. China and the USA spend by far the most money on
RFID and China will soon overtake the UK in number of projects.
Within the RFID industry, a major part of the growth has come
from existing applications such as security/access control,
automobile immobilization, animal tracking and toll collection.
However, emerging applications in security-based solutions,
contactless payments, and supply chain management are in late
testing stages and are expected to present significant new market
opportunities. In particular, use of RFID technology in conjunction
with contactless payment cards and Wi-Fi has emerged as a
substantial opportunity for RFID vendors.
In November 2009, Primer Wen Jiabao of China emphasized his
country's focus on the key technology of "the Internet of Things
and Sensor Network" and during September 2009, RFID was listed in
the "Direction of Investment for Reformation and Technical Progress
of Electronic Information Industry" by the National Development and
Reform Commission of China. It is anticipated that the Chinese RFID
market will continue to grow rapidly in the years to come in light
of encouragement sustained by the Chinese Central Government.
Further information:
Please feel free to call Investor Communications toll-free on
1-888-367-3077.
About Regal Group, Inc.
Regal Group, Inc. (formerly, Regal Life Concepts, Inc.) is a
publicly traded company with headquarters in Phoenix, Arizona.
Regal is strategically positioning itself in key industry sectors
in China, including the wine industry where Regal has made a
strategic investment in AWA Wine, and is investigating further
opportunities in Asia. Regal trades on the NASDAQ OTC BB under the
ticker symbol: RGLG.
About UHF Logistics Ltd.
UHF is a HK-incorporated holding company, which through its
wholly owned Chinese operating subsidiaries, is focused on the
development, marketing and implementation of UHF RFID products and
solutions in China since 2006.
Forward-Looking Statements
Statements in this news release that are not historical facts
are forward-looking statements that are subject to risks and
uncertainties. Words such as "expects," "intends," "plans," "may,"
"could," "should," "anticipates," "likely," "believes" and words of
similar import also identify forward-looking statements.
Forward-looking statements are based on current facts and analyses
and other information that are based on forecasts of future
results, estimates of amounts not yet determined and assumptions of
management, including, but not limited to, the Company's belief
that Regal can identify and successfully negotiate business
prospects in Asia, and that the Company can successfully operate
such prospects. Actual results may differ materially from those
currently anticipated due to a number of factors and risks beyond
the reasonable control of the Company.
Further, the completion of the proposed transaction is subject
to a number of risks, which include, among others, the corporate
disclosure, governance and regulatory requirements of the Peoples'
Republic of China (the "PRC"), and PRC regulations relating to,
among others, cross-border mergers and acquisitions, product
liability and currency exchange rates. Even if the proposed
transaction is completed, which cannot be guaranteed, anticipated
synergies or other intended benefits of the transaction may not be
realized, and the prospects of the combined entity will remain
subject to all the general risks associated with the RFID industry,
the public securities markets and risks related to doing business
in China, such as the PRC's economic, political and social
environment, and matters relating to PRC taxes, repatriation of
profit and currency conversion, acquisition and appropriation of
land use rights, foreign investments, permits and business
licenses, employment contracts, government intervention,
shareholders' rights and enforcement of judgments, as well as the
developing PRC legal system. The Company cautions that the
foregoing list of material factors is not exhaustive.
When relying on the Company's forward-looking statements and
information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. Additional information on risks and other
factors that may affect the business and financial results of the
Company can be found in filings of the Company with the U.S.
Securities and Exchange Commission. The Company undertakes no
obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date
hereof.
Contact: Regal Group, Inc. Investor Communications Toll-Free:
1-888-367-3077
UHF Logistics (PK) (USOTC:RGLG)
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